Blow for consumers as bank charges case is dropped

This article was correct at the time of publication. It is now over 6 months
old so the content may be out of date.

Consumers hoping to claw back millions of pounds in bank charges have been dealt a heavy blow with the news that the Office of Fair Trading (OFT) has announced its investigation has been dropped.

The OFT's decision comes after last month's ruling by the Supreme Court that the fairness of unauthorised overdraft charges could not be challenged. The body had been looking at alternative legislation to challenge the charges, but has not been successful.

However, the OFT said it continues to be concerned about the way banks operate their current accounts, and encouraged customers shopping around for the best deals.

"Having now considered all the options available to us in the light of the judgment, we have decided not to continue what would be a narrow investigation with limited prospects of success," said John Fingleton, OFT chief executive.

"But we remain deeply concerned that the market for personal current accounts is not working well for consumers and does not give banks sufficient incentives to compete.

"We are committed to securing significant changes to unarranged overdraft charges going forward, whether through voluntary agreement with the banks or by other means. Customers can play their part by looking for value for money and switching accounts if necessary."

The decision to drop the case follows a campaign by the OFT that has spanned some two and a half years. It had been hoped that around a million bank customers would be compensated with a flurry of additional claims to follow.

Consumers can still appeal for a refund but are likely to be rejected.

Related Articles

How many have better budgeting as their New Year’s resolution? As with many things, these skills are best learned when young, so Lemonade Money has come up with some tips to help parents make their children more financially savvy.

Money worries are putting Christmas at risk for up to five million Brits, with 10% saying they regularly worry about money in the lead up to Christmas, and the same proportion feeling stressed about how much they are spending.

We all have our own ideas of what makes a dream home, and for many, character features are at the top of the list. But how much more would you be willing to pay for those kinds of additions – and could they even help you save money in the future?